Tuesday, Baird analysts reiterated their Outperform rating for Axsome Therapeutics (NASDAQ:AXSM) shares, maintaining a $116.00 price target, which aligns with the broader analyst consensus showing targets ranging from $105 to $180.
According to InvestingPro data, the stock appears undervalued based on its Fair Value analysis, with 7 analysts recently revising their earnings expectations upward.
The firm's confidence persists despite mixed phase 3 results for AXS-05 in Alzheimer's disease agitation, announced earlier today. Baird analysts believe that the probability of approval for AXS-05 remains at 60%, although they acknowledge that investor confidence in the drug's success may vary following the recent findings.
The mixed results from the phase 3 study have led to a cautious outlook regarding the drug's approval process. AXS-05 is being developed to treat agitation in patients with Alzheimer's disease, a condition that currently has limited treatment options.
The Baird team pointed out that the uncertainty surrounding AXS-05's approvability is likely to continue until at least 2026, as the New Drug Application (NDA) filing is not anticipated until the second half of 2025. Get deeper insights into Axsome's financial health and growth potential with a comprehensive Pro Research Report, available exclusively on InvestingPro.
The analysts' comments reflect a recognition of the complexities inherent in developing treatments for neurological conditions, especially those associated with Alzheimer's disease. While the mixed phase 3 results have not dampened Baird's overall assessment of Axsome Therapeutics' potential, they have tempered expectations for immediate progress.
The company maintains impressive gross profit margins of 91% and has demonstrated strong revenue growth of 51% over the last twelve months, with a healthy current ratio of 2.44 indicating solid short-term liquidity.
Axsome Therapeutics has not yet publicly responded to the analysts' remarks or provided additional details on the phase 3 study outcomes. The company's focus remains on advancing AXS-05 through the clinical and regulatory pipeline, with the goal of addressing the unmet medical needs of Alzheimer's disease patients.
The next significant milestone for Axsome will be the anticipated NDA filing in the latter half of 2025.
For comprehensive analysis and real-time updates on Axsome's financial metrics, valuation, and growth prospects, explore the full suite of tools available on InvestingPro, including exclusive ProTips and detailed financial health scores.
In other recent news, Axsome Therapeutics has been the subject of several analyst assessments, with Leerink Partners maintaining an Outperform rating and a $110 price target. The rating follows promising results from clinical trials for Axsome's Alzheimer's disease agitation (ADA) treatment, Auvelity. However, the company's New Drug Application (NDA) submission has been delayed until the second half of 2025, pushing regulatory clarity to 2026.
Guggenheim's report suggests that the FDA's decision, anticipated in 2026, will be a significant catalyst for Axsome, with potential to rise to the $130 range upon approval of Auvelity. The firm's price target remains unchanged despite recent study results.
RBC Capital Markets and Mizuho (NYSE:MFG) Securities also remain optimistic about Axsome, with RBC Capital Markets increasing its price target to $132 and Mizuho Securities raising its price target to $124. The adjustments follow a post-third quarter evaluation and the inclusion of revenue projections for solriamfetol.
Axsome reported record-breaking revenue for the third quarter, exceeding $100 million for the first time. The financial milestone was largely driven by the sales of its major depressive disorder treatment, Auvelity, and its excessive daytime sleepiness medication, Sunosi.
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